Seems like PayPal and Indian bloggers have love and hate relationship. Earlier Paypal imposed some new rules for Indian PayPal users. One of them was withdrawing money from PayPal account to bank account within 7 days. Though I never faced any issue with this feature and seems like PayPal has come up with another solution to make it mandatory for Indian users.

PayPal started offering automatic withdrawal for Indian users. Interesting thing is, apart from FAQ page PayPal has not made any official statement or comment regarding this new Auto withdrawal feature.

How to use PayPal auto withdrawal feature?

On the next page select bank account or you can click on Add bank account to add a new one. In my case I selected my existing bank account and clicked on make auto withdrawal.

Though there are many unanswered question like What will happen if withdrawal amount is less then 7000. (Update: See below for an update on this). As Paypal charges INR 50 for withdrawal amount on 6,999 or less. I believe we will have answers to such question soon. Another drawback is now we can’t hold money in our account to wait for good foreign exchange rate. We will cover more on this But for now I suggest you to check out FAQ page from PayPal.

PayPal FAQ page has added some information regarding the auto withdrawal feature for Indian users.

Here is useful excerpt from the FAQ page:

What is auto withdrawal?
Auto withdrawal is the process of automatically transferring your funds from your PayPal account into your bank account in India.
Where will my funds be auto withdrawn to?
Your PayPal balance will be auto withdrawn to your bank account in India. If you have one bank account added to your PayPal account, it will be set as your auto withdrawal account. In case you have more than one bank account added to your PayPal account, you will have an option to set your auto withdrawal account.
Why are my funds being auto withdrawn?
This is an Indian regulatory requirement and applies to all PayPal users in India.
When does auto withdrawal happen?
Your PayPal balance is auto withdrawn to your local bank account in India daily. You can check your bank account within 5-7 working days after your funds have been auto withdrawn from your PayPal account.

Another news is Indian Paypal users still can’t use their money in PayPal account for any purchase and with this new changes, I believe we don’t expect it be back again for Indian users. So any money receive on your PayPal account, Indian users can only withdraw it directly to bank account.

Though it’s sad to see PayPal dying in India and specially when it’s considered as one of the standard for online payment. Anyways I will keep you updated with latest and update on PayPal and India Love hate relationship. For now you can check out 5 PayPal alternative sites.

Update: So finally we got answer to some of the unanswered questions and first of them is there will be no withdrawal charges for Indian Paypal users. No matter how much amount it is, it will be withdrawn into your bank account without any charges.

Though for newbie PayPal users, you need to have your PayPal name and bank account exactly the same, else you won’t be able to link your bank account. In case, if you have used misspelled name or nickname, you can contact PayPal and provide them with PhotoID proof and they will update your profile to match your bank account name.

So if you are an Indian PayPal user, you need to update three things in your account instantly: Pan, Bank account and Paypal purpose code.

It’s good to see that PayPal has made things clear now and despite of all the restrictions like we can’t make Payment using existing credit on PayPal account, I believe as a webmaster we will continue using it, since it’s a standard mode of Payment globally.

sir i have verified paypal account.on 12th august i received 8$ from ptc site . my paypal balance was autowithdrawn on 13 th august 2014 but yet i am not recieved this fund till 18th august.usually payments received within 3 days,after paypal balnce withdraw but this times i have trouble wat problem. i think 15th friday independce day and 16th saturday so governmnt holiday then 17th sunday. this is the problem to recived payments? pls

My Paypal story. One month ago i brought a new debit card of union bank of india they given me the RuPay debit card, I brought it just to order some gigs and to purchase some stuff from internet through paypal. I thought everything will go easily.
First thing i signed up to paypal that was an easy process. second thing i given all the information of mine to paypal like adhar card, pan card and even that was an easy process third thing i try’d to link my account to paypal so i had given all my bank account no and all the other information after that they said you will get two small deposits in you bank just in 3 working days and that deposits will be your verification amount. so as they said i got two deposits in my account of 1 rs ,1 rs so i inserted that amount in paypal verification but it said wrong deposit amount insert again so i inserted the same amount for 3 to 4 times then all the things disappeared. paypal said me to again put your account number and card number so i try’d to do that again but i got the message this account number having some issue please contact our costumer services. but before doing that again i went to my bank website and again i checked both of that deposit amounts but now it was something different now that amount was updated and it was showing me 1.47 rs and 1.03 rs, so i decided to talk with paypal costumer service i told them about my verification problem they said me to give my paypal email address i given them then after a hour they replied me they have reseted my account and they told me to again put the same account number and card number to get linked to your bank account so i did what they said then i got the again i got the message that you will get two small deposits in 2 to 3 working days then after few days i got that deposit and then i verified my account successfully. now i was soo happy i try’d to purchase a product form internet through paypal. so i entered the website address from where i wanted to purchase the product there they asked me to purchase this product put your paypal email and password so i did then i got error your card don’t wont allow you to do this transaction contact you card supplier. so i went to my bank and they said we dont know anything about paypal ask our internet banking department they given me the phone number. so i made a call and I asked them about paypal they told we don’t support paypal and i was really very disappointed so i went to another indian bank i asked them about paypal they said we dont have any idea about paypal. and then i searched on google about it and i landed on result that paypal dont support indian bank debit cards only we can use credit card to purchase anything through paypal. but as i am a student bank will not give me any credit card so i googled it and got some news that paypal only supports icici debit card to do transactions. so now i am going to open my account in icici if anyone is having some paypal issues with icici debit card then please let me know

Yes, it is very unreasonable for RBI to impose such restrictions – it really puts a lot of inconvenience for online marketers. They also killed other ways of receiving payment like the Payoneer card. I recommend you use 2CO or Payza if you are an online marketer.

I havent got this info anywhere till now. My question is I am in India and can i use Pay Pal to send money to someone abroad through my linked Bank account? coz i dont have Credit card and Debit card is not getting linked to my Pay Pal account. Any clarifications please?

Hi Friends
I have bank account in state bank of india and which is verified in paypal. I mentioned all of things like pan number purpose code verified email ID etc. I have balance in my paypal account but I can’t withdrawal it there is says your access is limited. Its need to debit or credit card? two months gone I don’t got any payment in my bank account so please can any one help me? please friends if you know this type of problem kindly share me.
thanks….

Hey Sandip
I would suggest get in touch with Paypal support. They can tell you why your account is still in Limited profile. As far my knowledge, you need to have a funding source associated with your account.

Its better if we have it in our control than auto w/d. Other than this, recently i opened a new PP a/c for my brother, it instantly got limited saying that PAN card is under verification.. they are still verifying past 2 weeks :P

Well, it’s pretty tricky now for Indian Users. Intially, they had a scheme wherein anything below Rs.7000 had a processing fee of Rs50 and anything above it, for free. Now, it is mentioned no withdrawal fee but actually it is pretty tricky. Look at what they say below.

“If foreign exchange or currency conversion is required to complete any transaction, this will be performed by a licensed financial institution. The foreign exchange rate is adjusted periodically on a daily basis to reflect market conditions and includes a 2.5% processing fee which is retained by PayPal. The exact exchange rate that applies to your transaction will be displayed to you at the time of the transaction.”

It is very obvious that we can’t do anything with a PayPal account only linked to Bank Account (Not Credit Card Holders), but to just transfer the amount to our Banks. So, apart from the money they make in currency conversions (they usually take the avg and not the current value), they’ll charge 2.9% processing fee as well.

I leave it to the users to think which option is better. The initial one or the new and if I’m wrong, please do correct me:)

actually i have a question regarding this system, like when we create paypal account and link it with our bank account than what is the next step to do? As they have sent a mail to check your bank account which is depositted with rs. 1 please help me what to do next

Ujjwal even I’m using PayPal and I can’t leave it because at this moment this is standard. Though if in future Google, Facebook or any third company launches any thing reliable, any good alternative, I will switch to that. Since PayPal is causing lots of issues and specially limitations for Indian PayPal users.

Mani the thing is money in your PayPal account is useless as you can’t use it to buy something or send it to anyone. So this Auto withdrawal doesn’t make any difference infact this will make work automated. Though the problem is processing fees for lower amount withdrawal ….

Also ,This is also very bad ,I have to give everytime 50INR ..if it withdraws daily ,What the hell is that? As we are top IT services country but we don’t have even our fully functional system like paypal and if other guys are providing services ,our politicians suing them ,We don’t have guts to make system like paypal? How big IT services country are we ..I doubt it ??

Amit it’s not certain if they going to charge for automatic withdrawal or not..Or if the amount with be auto withdrawn once your account reaches 7000 INR threshold. Lets wait for an official announcement…